Trump Media’s first-quarter financial statements, released on May 20, show negative earnings of $327 million. However, this number includes items related to loan repayments and employee compensation. Analysts are looking for more information to understand the company’s strategies and management’s expectations. Without a public earnings call with CEO Devin Nunes and other executives providing business comments and outlooks, Wall Street analysts are left without the confidence needed to assess the company.
The lack of fundamental support from Trump Media’s management leaves analysts unsure about the company’s future. The stock has recently tried to break above the $50 barrier but has seen weak Friday closes. Following the earnings report release, the stock has dropped to the interim barrier of $45. Without a solid financial foundation, the stock is at risk of a technical plunge as investors may start to sell off their shares due to uncertainty about the company’s performance.
Short sellers, who sell weak company stock in the hopes of buying back at a lower price, are not defeated by the current situation with Trump Media. There are millions of shares awaiting SEC registration approval to be sold, indicating that shareholders who received the stock through a loan conversion or as payment may not have a strong desire to hold onto their shares. The advice to “Don’t fight the tape” suggests that investors should pay attention to the stock’s trend and not be swayed by past excitement.
As Trump Media struggles with negative earnings and a lack of fundamental support, the stock’s future remains uncertain. Without a clear outlook from management and with potential selling pressure from shareholders waiting to offload their shares, the stock is at risk of further declines. Investors are advised to pay attention to the stock’s trend and be cautious about the company’s future prospects in the volatile market.
